Income Tax Relaxation In Covid-19 Relief Packages

Nirmala Sitharaman finance minister has announced new tax measures for the Covid-19 relief package. As Prime Minister Narendra Modi has earlier promised an economic relief package for Indian people in this pandemic, regarding this statement finance minister has taken some serious steps to boost our economic problem, which is centered on land, law, and liquidity of the economy. 

The measure which is announced will give a huge benefit and relief to the business sector and play a vital role in the increase of the economy and cash flow. The beneficial rates would be available until the end of the current financial year.

TDS/TCS Rate Reduction 

  • Reduction of 25percent in the existing rates for tax deduction at the source for specified non-salary payment which is made to residents.
  • For specified receipts has the rate of tax collection is also reduced by 25 percent.
  • Various payment for a transaction like a contract, commission, brokerage, rent, professional fees, interest, a dividend that will be eligible for TDS rates.
  • 50,000 crores liquidity will release from the reduction in rates for TDS and TCS, as per government estimates.

The tax department would have the number of applications under Section 197 of the income tax law to allow lower retaining, On the off chance that benefit of an organization is relied upon to stay low, the general sum that is payable in a type of tax will likewise be lower, thus assessees would’ve mentioned the income office for a lower retaining rate.

Updated TDS Rates

The government has advised certain amendments in TDS rates for the period between May 15, 2020, and March 31, 2021: 

  • TDS on payment of profits by mutual funds, interest on protections, profit, and interest under Section 194A, commission, business just as the lease on ardent property has been decreased to 7.5 percent as opposed to existing 10 percent. 
  • TDS on Online business members like e-commerce, payment for obtaining steady or immovable property has been decreased to 0.75 percent contrasted with the existing 1 percent. 
  • TDS rate for payment made to contractual workers and sub-temporary workers by a Hindu Undivided Family or other corporate bodies has been diminished to 0.75 percent and 1.5 percent, individually.  

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